Gold vs silver: Precious metals hit record highs, but risk–reward now tilts toward gold: Report
Gold and silver have surged into the spotlight as gold and silver scale record highs amid rising geopolitical risk and global macro uncertainty. However, after silver’s sharp outperformance, market strategists are beginning to see a clearer near-term case for gold as the steadier allocation.
- Jan 23, 2026,
- Updated Jan 23, 2026 4:13 PM IST
Precious metals are back in sharp focus as both gold and silver hit record levels, prompting investors to reassess allocations. Gold prices surged past $4,960 an ounce, logging a weekly gain of over 7%, while silver climbed close to $97 an ounce. The rally reflects a powerful resurgence of safe-haven demand amid global uncertainty.
Escalating geopolitical tensions involving Venezuela, Iran and Greenland, along with renewed criticism of the US Federal Reserve by President Donald Trump, have reinforced the so-called “debasement trade.” Investors are increasingly shifting away from sovereign bonds and currencies toward hard assets such as gold and silver.
The momentum is equally visible in India. MCX gold prices touched fresh peaks near ₹1.59 lakh per 10 grams, while MCX silver surged beyond ₹3.39 lakh per kg. However, despite these headline gains, market strategists caution that the investment outlook for the two metals is beginning to diverge.
Silver’s outperformance
Motilal Oswal Financial Services Ltd. (MOFSL) highlights that silver has delivered an exceptional rally of more than 200% over the past 12 months, sharply outperforming gold’s roughly 80% rise. This has compressed the gold–silver ratio from pandemic-era highs of around 127 to nearly 50 at the start of 2026—well below its long-term average of about 70.
Where to invest
MOFSL notes that silver’s sharp run has altered the near-term risk–reward equation. With the ratio now near historically low levels, the balance is shifting in favour of gold.
“Silver has delivered sharp outperformance in a short span, and with the gold–silver ratio now near lower levels, the near-term risk-reward is turning more favourable for gold. While we remain positive on both metals and silver continues to have long-term upside backed by industrial demand and tight physical market conditions, the recent rally has also increased near-term volatility. In this phase, a higher allocation to gold can help manage fluctuations while staying invested in precious metals," said Navneet Damani, Head of Research Commodities and Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd.
Why is MOSL bullish on gold?
A reversion of the gold–silver ratio toward the 65–70 range would signal relative outperformance by gold, reinforcing the case for a higher allocation as a risk-managed positioning rather than a negative stance on silver. At the same time, silver has seen a sharp rise in volatility, marked by wider daily ranges and quicker price swings. Gold, by contrast, continues to exhibit trend stability with more contained pullbacks, making it better suited for portfolios seeking balance and downside control.
ETF flows
Investor flows support this view. Despite strong prices, global silver ETFs have seen net outflows, while gold ETFs continue to attract steady inflows. This suggests investors are gradually rotating away from higher-volatility trades toward safer havens as uncertainty rises.
Liquidity and volatility
Abundant global liquidity—reflected in elevated money supply levels in the US and China—has lifted asset prices but also increased volatility. In such conditions, gold’s lower beta and defensive characteristics offer better downside protection, while silver’s price swings have widened due to tight supply and speculative activity.
Silver’s long-term case
MOFSL stresses that this is not a negative call on silver. Structural supply constraints and industrial demand continue to underpin its long-term prospects. However, after a rapid rise from around ₹60,000 to over ₹3.2 lakh, a phase of consolidation or rebalancing appears likely.
How investors should allocate
To manage risk while staying invested in precious metals, MOFSL suggests a rebalanced allocation of roughly 75% gold and 25% silver. This approach favours gold as a steadier hedge in the current phase, while retaining exposure to silver’s long-term structural upside.
For investors weighing gold versus silver, the takeaway is clear: silver has delivered exceptional gains, but gold now offers a more balanced and stable opportunity as markets navigate heightened geopolitical and macroeconomic uncertainty.
Precious metals are back in sharp focus as both gold and silver hit record levels, prompting investors to reassess allocations. Gold prices surged past $4,960 an ounce, logging a weekly gain of over 7%, while silver climbed close to $97 an ounce. The rally reflects a powerful resurgence of safe-haven demand amid global uncertainty.
Escalating geopolitical tensions involving Venezuela, Iran and Greenland, along with renewed criticism of the US Federal Reserve by President Donald Trump, have reinforced the so-called “debasement trade.” Investors are increasingly shifting away from sovereign bonds and currencies toward hard assets such as gold and silver.
The momentum is equally visible in India. MCX gold prices touched fresh peaks near ₹1.59 lakh per 10 grams, while MCX silver surged beyond ₹3.39 lakh per kg. However, despite these headline gains, market strategists caution that the investment outlook for the two metals is beginning to diverge.
Silver’s outperformance
Motilal Oswal Financial Services Ltd. (MOFSL) highlights that silver has delivered an exceptional rally of more than 200% over the past 12 months, sharply outperforming gold’s roughly 80% rise. This has compressed the gold–silver ratio from pandemic-era highs of around 127 to nearly 50 at the start of 2026—well below its long-term average of about 70.
Where to invest
MOFSL notes that silver’s sharp run has altered the near-term risk–reward equation. With the ratio now near historically low levels, the balance is shifting in favour of gold.
“Silver has delivered sharp outperformance in a short span, and with the gold–silver ratio now near lower levels, the near-term risk-reward is turning more favourable for gold. While we remain positive on both metals and silver continues to have long-term upside backed by industrial demand and tight physical market conditions, the recent rally has also increased near-term volatility. In this phase, a higher allocation to gold can help manage fluctuations while staying invested in precious metals," said Navneet Damani, Head of Research Commodities and Manav Modi, Commodities Analyst, Motilal Oswal Financial Services Ltd.
Why is MOSL bullish on gold?
A reversion of the gold–silver ratio toward the 65–70 range would signal relative outperformance by gold, reinforcing the case for a higher allocation as a risk-managed positioning rather than a negative stance on silver. At the same time, silver has seen a sharp rise in volatility, marked by wider daily ranges and quicker price swings. Gold, by contrast, continues to exhibit trend stability with more contained pullbacks, making it better suited for portfolios seeking balance and downside control.
ETF flows
Investor flows support this view. Despite strong prices, global silver ETFs have seen net outflows, while gold ETFs continue to attract steady inflows. This suggests investors are gradually rotating away from higher-volatility trades toward safer havens as uncertainty rises.
Liquidity and volatility
Abundant global liquidity—reflected in elevated money supply levels in the US and China—has lifted asset prices but also increased volatility. In such conditions, gold’s lower beta and defensive characteristics offer better downside protection, while silver’s price swings have widened due to tight supply and speculative activity.
Silver’s long-term case
MOFSL stresses that this is not a negative call on silver. Structural supply constraints and industrial demand continue to underpin its long-term prospects. However, after a rapid rise from around ₹60,000 to over ₹3.2 lakh, a phase of consolidation or rebalancing appears likely.
How investors should allocate
To manage risk while staying invested in precious metals, MOFSL suggests a rebalanced allocation of roughly 75% gold and 25% silver. This approach favours gold as a steadier hedge in the current phase, while retaining exposure to silver’s long-term structural upside.
For investors weighing gold versus silver, the takeaway is clear: silver has delivered exceptional gains, but gold now offers a more balanced and stable opportunity as markets navigate heightened geopolitical and macroeconomic uncertainty.